As said by many a person, Kids on the Slope is stunning in an understated, era appropriate way. The details in the scenery, the near perfect sync with instrument playing: I was blown away. Princess Jellyfish and Baccano along with anything from Studio Ghibli pack both style and substance. Usagi Drop may not be too exciting to look at usually but the water color look was charming. Also, Tokyo Godfathers was beautifully done.

No one mentioned Gurren Lagann yet! I think it's really impressive because everything is hand drawn (except for the villians in the second half, though this is done on purpose). I really appreciate hand drawn effects over CG. It also was the start of shows having awesome animation. I think the one I saw after that was Soul Eater....

Fate/Zero is also very impressive.

Hyouka, also airing this season, has very amazing production values. The animation and story boarding is amazing.

I am a bit confused by the question in that is it best animation which from my understanding would be fluidity of motion, or best artwork and background/character design? It also seems as if they way in which it is watched would make a huge difference. You cant really compare a high quality blu ray to an internet stream. Both the artwork and animation on the EVA Rebuilds look gorgeous on a quality blu ray player and a high end 1080p display... panasonic plasma being my display of choice (can't afford an Elite.) The Kara no Kyoukai movies are also really good looking, especially the lighting effects as well as particle effects such as the dust in the abandoned buildings drifting in and out of the light. Animation is also nice in them.

Upon reading everyone's post, some people judge quality by pretty picture and while others judge it by fluid motion. Some people judge it by HDTV picture quality.

Since animation is combination of various disciplines of art, I think it's best to judge animation by specific quality. For example:

A. Animation

1. Depiction of life: Do character and FX movements appear realistic or fantastic?
2. Expression of motion: Full of energy & experimentation or stiff & boring?
3. On-model: Are characters look solid and consistent? Do they have crooked face or wrongly proportioned body?
4. Timing: Do speed of animation pleasing to watch or too confusing?

B. Design

1. Are character and/or machine designs appealing enough to stand the test of time?
2. Do background art truly reflect the world that characters live in?
3. Contrast: Can you tell characters apart right away at first glance?
4. Camera angle: Are they static or dynamic?
5. Are background arts fun & imaginative or boring & dull?
6. Do you find character or mecha designs tacky and repetitive?

I could go on with more criteria, but I've written enough.
I decided not to use video quality because there are plenty of well animated titles in DVD and older video formats. Also there are plenty of not-so-well animated shows come out in BD as well.

Instead of judging best animation quality by title, I would rather judge it by specific scene. That's because there are plenty of TV shows with quality animation scenes spread here and there.

Also where is the love for Bones? Hell, just watch anything they produce and you know it will have very high quality. Of course, if you watch their old stuff it may not be the best now, but for their time they were up there. On another note, of the modern top quality anime, I'd have to name a couple. Hellsing Ultimate was very slick, Eureka Seven: AO, the new Berserk films, Fullmetal Alchemist: Brotherhood, etc.
You can't seriously expect there to be only a handful. Quality means several things, as Maou mentioned, Miyazaki's films are still made by hand something that is very rare in the modern industry. That is because Miyazaki although it is becoming harder for him, dislikes relying on computer renderings preferring to hand draw everything. He tried it with Princess Mononoke but found he did not like the result, so he chose to stick with more traditional methods. Everything is subjective unless your specific in what terms of quality you mean.

I must add that in terms of quality animation hands down it would be Redline. Its really an accomplishment in anime taking the animators 7 or 8 years to complete as every frame is hand drawn on extreme detail.Your eyes will probably have an organism from all its stunning quality. In terms of TV anime , I think that would belong to K Project due to how detail and fluid the animation is for a regular 13 episode anime

I must add that in terms of quality animation hands down it would be Redline. Its really an accomplishment in anime taking the animators 7 or 8 years to complete as every frame is hand drawn on extreme detail.Your eyes will probably have an organism from all its stunning quality. In terms of TV anime , I think that would belong to K Project due to how detail and fluid the animation is for a regular 13 episode anime

This. It wins. You won't find any anime with better animation than Redline. Those interested should download it.